FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

COVER LETTER TO THE STATEMENT 

OF COMMISSIONER ELLEN L. WEINTRAUB 

IN MUR 6920 (AMERICAN CONSERVATIVE UNION) 

DECEMBER 19,2017 

Due to pending litigation, I must take the unprecedented step of releasing the attached 

statement with the identities of certain persons and entities redacted. As can be seen from my 

statement and the third General Counsel's Report, these were not incidental witnesses swept up 

in the agency's probe, but rather key players in the scheme the Commission unanimously found 

to have violated the law against making contributions in the name of another. 

After engineering an intricate plot to defeat the public's interest in knowing who was 

actually behind a $1.7 million political contribution, the plaintiffs are now taking the 

extraordinary step of suing the Commission to force us to continue to hide their identities.' I am 

looking forward to the expeditious resolution of this litigation with a ruling in the EEC's favor 

that will allow me to reissue my statement unredacted. 

The public has the right to know as much as this agency was able to determine about who 

was trying to influence the election with this huge contribution. Likely the beneficiaries of their 

largesse already do. 

I suspect this will prove unwise. See "Streisand effect," httDs://en.wikiDedia.orc/wiki/Streisand effect 
FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

BEFORE THE FEDERAL ELECTION COMMISSION 

In the Matter of 

American Conservative Union; 

Government Integrity LLC; Now or 

Never PAC and James C. Thomas, III in 

his official capacity as treasurer; James C. 

Hiomas III 

MUR 6920 

STATEMENT OF REASONS 

OF COMMISSIONER ELLEN L. WEINTRAUB 

This important case is an egregious example of someone using a web of organizations to 

hide the true source of a $I .7 million contribution to a super PAC - and getting away with it. The 

complaint that Citizens for Responsibility and Ethics in Washington ("CREW") filed with the 

Commission in this matter in February 20 IS alleged serious violations of the laws against 

making, accepting, or assisting with a federal campaign contribution in the name of another.' 

Amended tax filings had revealed that $1.71 million had been routed through the American 

Conservative Union ("ACU") to Now or Never PAC, but the true source of the money was 

unknown. Almost three years later, CREW, the Commission, and the American public are still in 

the dark. 

The Commission unanimously confirmed that the prohibitions against contributions in 

the name of another apply to super PACs, made rare knowing and willful findings, and 

negotiated a $350,000 penalty. Nonetheless, whoever concocted this elaborate scheme - in . 

which money was tunneled through at least four organizations (that we know of) in order to 

influence federal elections - succeeded in hiding their identity from the American public. A 

penalty has been extracted from some of the culpable entities here, but we still have no idea who 

was behind the illegal behavior. 

In Citizens United, the Supreme Court recognized the important public interests served 

by transparency in campaign finance, in holding "elected officials accountable for their ... 

52 U.S.C. § 30122; 11 C.F.R. § 110.4(b). 
MUR 6920 (American Conservative Union) 

Statement of Commissioner Elien L. Weintraub 

supporters," in revealing "whether elected ofTiciais are "'in the pocket' of so-called moneyed 

interests," and in "enabl[ing] the electorate to make informed decisions."^ Unfortunately, as has 

been demonstrated in this matter, the courts have been naTve to allow corporations to fund super 

PACs without taking into account the ease with which they can be used to circumvent disclosure. 

While the penalty is not insignificant, it fails to reflect the magnitude of the violation and 

the lengths to which respondents went to conceal the true source of the money and is an 

inadequate deterrent to future wrongdoing. Penalties that are not commensurate with the amount 

in violation risk being written off as a "cost of doing business." For someone who is willing and 

able to pour millions of dollars into political activity, an additional $350,000 is a rounding error. 

Here's what we know happened. ^ trust created 

and owned by unknown parties, through its trustee, •••••> the ironically 

named Government Integrity LLC ("GI") in September 

about Oct. 31,2012, IB transferred $2.5 million to GI. GI, through its lawyer, James Thomas, 

4 immediately transferred $ 1.8 million to AGU (a 501 (c)(4) tax-exempt organization). ACU 

5 immediately turned around and sent $I .71 million to Now or Never PAG, whose treasurer was 

I none other than GI's lawyer, James Thomas. 

5 AGU would not have had the money to make the contribution to Now or Never PAG 

^ without the transfer from GI.^ AGU pocketed $90,000 for tunneling the money and allowing its 

name to be used as the "donor" to the PAG.^ Thomas, as the PAG's treasurer, reported the $1.71 

million contribution as coming from AGU, although he plainly knew that AGU was not the 

ultimate source of the funds because he himself had transferred the money from GI to ACU. 

The Commission was able to discover this much, but despite authorizing subpoenas, we 

never learned the most important fact: the ultimate source of the almost two million dollars given 

to the PAG - the identity of the person who wrote the first check. 

Why? With everyone well aware of the clock ticking down to the expiration of the statute 

of limitations, subpoenaed witnesses refused to cooperate. A motion to authorize our Office of 

General Counsel to file suit to enforce our subpoenas (and find out the true source of the funds) 

failed 2-3, with my Republican colleagues all voting No. ® 

^ 558 U.S. 301,370 (2010). 

' Third General Counsel's Report, dated September 15,2017, at 4. 

* Id. at n.8. 

^ On or very shortly before October 31,2012,g|| wired $2.5 million to 01. On October 31,2012, Thomas 

sent an email to Now or Never PAG consultants stating, 'The 2.5 million Is here. I am about to wire $1.8 million to 

American Conservative Union." Id. Later that same day. Immediately after ACU's receipt of $1.8 million from 01, 

ACU wired $1.71 million to Now or Never PAC, keeping $90,000 (exactly 5 percent). Id. After Thomas confirmed 

that Now or Never PAC received ACU's transfer, ACU's executive director wrote to ACU's then-National Finance 

Director: "FYl. We have the 90k." She replied, "Well done! 111" MUR 6920 Global Conciliation agreement at 4. 

* Certification In MUR 6920 (ACU) dated Sept. 20,2017. 

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3 

i 

MUR 6920 (American Conservative Union) 

Statement of Commissioner Ellen L. Weintraub 

How did we find ourselves running up against the statute of limitations? The information 

underlying the complaint did not surface until years after the events took place.^ Then, after the 

Olfice of General Counsel forwarded its first set of recommendations to the Commission, the 

Commission failed to act for a full year. The recommendations were not even placed on a 

meeting agenda for almost a year.* By the time my colleagues were willing to move forward on 

this matter earlier this year, we were just about out of time. Ultimately, they directed staff to 

pursue a fine that was a fraction of the amount in violation. The Commission's lawyers were able 

to get the respondents to the negotiating table, a small miracle in itself, but they were unable to 

unearth the fUll truth of the matter. They traced the money back from Now or Never PAC to 

ACU to 01 to (the latter two entities having been unknown to the complainant). was 

identified late as a link in the chain, and while our General Counsel recommended finding reason 

to believe IB had violated the law and seeking further information from it, a motion to do so 

again failed on a 2-3 party line vote.' Who provided the money toBI 

chain extend? Frustratingly, we still do not know. 

This case is just the latest illustration of a longstanding concern of mine: Effective 

enforcement of the law is undermined by pervasive delays. On May 21,20 IS, I introduced a 

proposal to impose some discipline on the process and force the Commission to vote on our 

counsel's enforcement recommendations on a timely basis." Despite protracted negotiations and 

attempts to reach agreement at four separate meetings," I could not get a commitment from a 

majority of the Commission to abide by any firm deadlines. 

In this case. Commission neglect and respondents' deliberate concealment combined to 

defeat the public interest. Given their votes not to enforce the subpoenas or make findings 

againstBlj, it is not clear whether my colleagues would have been willing to investigate more 

vigorously even if we hadn't been up against the statute of limitations. But this much is clear: 

This case languished on commissioners' desks, and we failed in our mission to follow the money 

and trace it back to its ultimate source. The public had a right to know the true source of $ 1.7 

Third General Counsel's Report at n.29. 

* The Commission received the first General Counsel's Report on Jan. 20,2016, and did not take its first 

vote until Dec. 6,2016. That vote split, accomplishing nothing, and the Commission did not find reason to believe 

that a violation of the law had occurred until Jan. 24,2017, on a complaint where the SOL would begin to expire on 

Oct. 31,2017. Certifications in MUR 6920 (ACU), dated Dec. 6,2016 and Jan. 24,2017. 

' Certification in MUR 6920 (ACU) dated Sept. 20,2017. 

'® Memorandum dated May 18,201S from Commissioner Ellen L. Weintraub to the Commission, Proposed 

Directive 74 on the Timely Resolution of Enforcement Matters, Agenda Document No. 15-25-B,/oi//tt/ at 

https://www.fec.gov/resources/updates/agendaj/2015/mtgdoc_l 5-25-b.pdf 

" See FEC open-meeting agendas of May 21,2015 f found at httDs://www.fec.eov/uDdates/mav-21 -2015-

boen-meetine/); June 18,2015 (foundat httDs://wvyw.fec.eov/uDdatesfiune-l8-2015-ODen-meetinB/): July 16,2015 

(found at https://www.fec.gov/updates/iulv-16-2015-open-meetine/1: and Sept. 17,2015 {foundat 

https://www.fec.gov/updates/5eptember-l 7-201 g-qpen-meeting/). 

Page 3 of 4 
MUR S920 (American Conservative Union) 

Statement of Commissioner Eiien L. Weintraub 

million spent to influence the 2012 elections and routed through a series of transfers designed to 

obfuscate. That interest will likely never be vindicated. 

Date Ellen L. Weintraub 

Commissioner 

4 

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